Long-Term Debt

Notes payable to various banks, to finance various equipment purchases, payable in monthly installments between $646 and $10,107, with interest rates ranging from 2.39% to 9.63%, maturing from June 30, 2016 through December 28, 2020

$

495,503

$

604,005

Less current portion of long-term debt:

(146,073

)

(184,932

)

Long-term debt, net of current portion

$

349,430

$

419,073

The aggregate annual maturities of non-related party long-term debt are as follows:

Period Ending June 30,

2017

$

146,073

2018

132,555

2019

131,387

2020

71,235

2021

14,253

Total

$

495,503

Related Party Shareholder Loan

The Company had a note due to the largest shareholder of the Company. This note was unsecured, had a maturity date of December 31, 2016 and carried a 1% interest rate. On approximately January 1, 2016, the Note was converted to 10% cumulative preferred stock and the Note was cancelled. The total converted debt was $2,000,000. The balance of the note as of June 30, 2016 and December 31, 2015 was $0 and $2,017,301, respectively. The residual balance of $17,301 that was not converted was reclassified to a short term, unsecured, non-interest bearing related party payable, included with due to related party on our consolidated balance sheet.

On October 15, 2015, the Company acquired a related entity that was 50% owned by the largest shareholder of the Company. As part of that acquisition, the Company acquired a shareholder note owed to the same majority shareholder of the Company. The balance of the note, including accrued interest on the acquisition date was $1,512,753. As discussed above, $1,500,000 of this total was converted to Preferred Stock on approximately January 1, 2016.

On October 15, 2015, the Company acquired a related entity that was 50% owned by the largest shareholder of the Company. As part of that acquisition, the Company acquired a shareholder note owed to the same majority shareholder of the Company. The balance of the note, including accrued interest on the acquisition date was $1,512,753. As discussed above, $1,500,000 of this
total was converted to Preferred Stock on approximately January 1, 2016.